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UK: Aviva started mailing one million policyholders with reattribution voting packs

03 Jun 2009

Aviva has this week started mailing voting packs to around one million eligible policyholders*, inviting them to vote in the proposed reattribution of the inherited estate.

Eligible customers will receive their voting packs during the next few weeks. The packs will include a letter detailing the minimum payment for the individual policies. This offer will depend on the value of the policy, the type of policy held and how long the policy has left to run. The structure of the reattribution means that individual payments to policyholders will rise and fall in line with the value of the inherited estate**.

The voting pack gives details about the reattribution process and offers policyholders the individual opportunity to accept or decline the payment in return for giving up their right to future special distributions from the inherited estate. This is not a majority vote and those customers who vote "no" or don’t vote at all will not receive the payment. If approval is given for the reattribution to go ahead, Aviva then expects to start mailing payments to policyholders from November 2009.

The packs are designed to provide policyholders with the information they will need to make a considered decision. Ninety per cent of payments are expected to be between £200 and £1,150, with £200** as the minimum anyone will receive. Policyholders will need to respond with their vote by 21 August, ahead of a High Court hearing in September 2009.

The voting packs will include comprehensive booklets from both Aviva and policyholder advocate, Clare Spottiswoode, as well as a personalised voting form.

Clare Spottiswoode will also be holding reattribution roadshows at 10 locations across the UK from mid-June to mid-July***, to enable policyholders to ask questions and help them make their choice.

Gary Price, reattribution director for UK Life, Aviva, said: “We believe this offer represents a good deal for our customers. We have aimed to provide policyholders with as much information as we can, in plain English, to help them make their choice.

“Our research has shown that while a large proportion of policyholders have decided that they will accept the offer, there are still some who are unsure about their decision. The voting pack, combined with our dedicated website and call centre as well as the policyholder advocate roadshows will enable people to make an informed choice.

“This process is not a majority vote. It is the opportunity for each individual policyholder to make the decision that is right for them, so we would encourage as many people as possible to vote. For policyholders who don’t vote this will be classed as a no vote and they will not receive a payment. However customers vote they will continue to receive their normal bonuses and it will have no impact on the security or performance of their investment.”

Customers who choose not to vote will automatically be classed as a "no" vote. Regardless of how people decide to vote they will continue to receive their normal bonuses and it will have no impact on the security or performance of their investment.

The "inherited estate" is part of a with profits fund. It is the amount over and above that which is required to meet realistic liabilities and which the insurance company retains to ensure it can meet its promises to customers; to support investment flexibility and fund security; and provide the initial capital to support new business. The inherited estate has been built up over many years and is an asset of the company.

Policyholders in the CGNU Life and CULAC with profits funds will be able to choose whether to receive a payment now in return for giving up their right to receive uncertain future distributions from the funds' inherited estates. The reattribution remains subject to further court and regulatory approvals and the ratification of the deal by the boards before the High Court hearing.

If the High Court approves the reattribution the boards of the with-profits companies and the Aviva plc board will, as provided in the Scheme, finally review the position immediately prior to the effective date to ensure that there has been no material change which would adversely affect the Aviva Group or implementation of the Scheme.

Aviva, the international savings, investments and insurance group, is the world’s fifth largest insurance group, serving 50 million customers across Europe, North America and Asia Pacific.

In the UK, Aviva is a leading provider of life, pensions, investment, general insurance and health products to more than 20 million customers. Aviva also provides roadside assistance through the RAC. Products are distributed through a number of channels including IFAs, brokers, corporate partners and direct to customers via the internet.

Aviva's UK Insurance business has a market share of around 15%, making it the largest general insurer in the UK. The business is focused on insurance for individuals and small businesses.

Aviva's life and pensions business in the UK has a total market share of 12% and a top three position in its key markets of savings, protection, and annuities.